When developers must continually make micro-payments to continue to run and employ their DApps or contracts, price increases make it much less practical to continue to run and develop applications.
If a developer is testing or employing applications on the Ethereum blockchain, the costs associated with running and hosting their applications are higher than they have ever been. While this doesn't effect users and individuals who have been holding Ether for awhile, the increased token price of Ether makes much harder for a developer new to the Ethereum space to justify purchasing sufficient tokens to temporarily run their application. Even just the gas costs associated with initial development and testing can be enough to turn developers away, which will make it that much harder for the platform to gain adoption. A developer or company that is hosting a large application on the Ethereum network would be faced with higher costs than ever before, and may even effect their ability to continue running the application.
As the value of Ether goes up, the costs associated with purchasing sufficient tokens to host applications also goes up. Ethereum has yet to produce an application to gain serious success or practicality, which would likely make new development on the platform even harder to justify. The miners are the ones who really win when the network experiences a rapid price increase, because the increase in computation power is often behind the increase in price. In order for a Dapp on the Ethereum network to have a chance for success, the developers would need to invest significant resources into the application with the hope that the network would be able to support the activity. Due to the fact that Ethereum counts every 'instruction' that it is given and charges accordingly, the network cannot handle anywhere close to the level of activity that mass adoption would bring.
Why would an 'ownership' model be more efficient than Ethereum's 'rental' model?
Instead of being entitled to the amount of computation power that you are able to pay for on Ethereum, the EOS platform presents an 'ownership' model of entitlement of resources. If you own 1/1000 of the total stake of EOS, then you will always have access to 1/1000th of the total network bandwidth and storage. This will enable developers to have much more predictable costs and will also serve the advantage that instead of hosting costs, it will simply require the individual to maintain a certain percentage or level of stake. If the application developer or company decides to take the application offline, they will have the exact same amount of tokens that they put into the platform. This enables EOS to gain in value as practicality and demand increases, and also will enable EOS to be a long term investment. While I don't mean investment in the traditional sense, I simply mean that the EOS tokens will always entitle the individual to a certain degree of bandwidth and storage.
All stake holders of EOS tokens will have the ability to use the tokens themselves, rent, or delegate their stake to others, and this leads me to believe that many of the large stakeholders will be more than eager to delegate significant amounts of their stake to developers working on promising applications. The determining factor for the success of any smart contract platform or even blockchain project for that matter is if the project is able to offer significant enough incentives to convince individuals to use the blockchain or application. The success of smart contract platform relies heavily on the ability to bring decentralized versions of mainstream applications, while maintaining the advantages that come along with decentralization such as cost savings and increased efficiency. While decentralized platforms aren't always more efficient than centralized platforms, many of the biggest and most popular applications could be vastly improved through decentralization.
Interacting with the blockchain must be free for end users.
Many users may not know this but like EOS users of the Steemit platform are actually granted access to bandwidth based upon their stake in the platform. Every new account is given a minimal amount of Steem Power in their wallet, and that is simply to enable them to have access to sufficient bandwidth to use the platform effectively. The same thing will likely be true on EOS, and this type of structuring is actually very important. Instead of having users send micro-payments every time they interact with the blockchain or network, users are able to use the network with absolutely no cost to themselves. While DApps on the EOS blockchain will all have their own monetizing strategy and business logic, the cost for a user to interact with the EOS blockchain will be free. While the minimal stake they are granted doesn't give them access to very much bandwidth, it gives them access to enough bandwidth to use applications on the platform.
If the user decides that they want to continue to use the EOS platform, they would have the ability to purchase stake if they desired. While applications could deploy a specific and application specific cryptocurrency, it is more likely than many application will use deploy the EOS token as their means of transferring value. For example a ride sharing DApp could create its own cryptocurrency that users and drivers would have to exchange to the EOS and then to their desired fiat, but utilizing the EOS token as a means of transferring value would likely be much more efficient. This would also enable drivers and providers on the application to have the ability to directly keep some of their earnings as an investment in the EOS platform. While Steemit has a great method of token distribution, the applications on the EOS platform could easily give normal and everyday individuals the ability to earn stake in the platform without any capital investment.
While the initial distribution is still not released or disclosed, I have very high hopes for the distribution after the adoption of mainstream applications. Applications on the EOS platform could revolutionize the idea of value creation and who actually has the rights to the value that is created. The ability for users to interact with the network or its applications for free will be a huge advantage for EOS over Ethereum, and EOS will actually have the ability to scale with demand and adoption. While EOS is seeking to achieve many of the same goals that Ethereum is, EOS is attempting to accomplish their goals in a much more sustainable and practical way. The idea of a single blockchain that can support a wide range of applications and services is brilliant, but EOS actually will have the means to create and maintain such a platform.
I really hope that you enjoyed this post, and I urge you to leave any comments, questions, input, ect. in the comments below. Thanks for reading!